March 26 (Bloomberg) -- Six U.S. states, led by
Massachusetts and California, are taking steps to put public
pension overseers in charge of retirement savings plans offered
to nongovernment workers, according to an advocate of the idea.

Massachusetts, California, New York, Florida, Ohio and
Connecticut have made or are actively considering such moves,
said Hank Kim, executive director of the National Conference on
Public Employee Retirement Systems, a trade group in Washington
that backs letting government fund managers control retirement
plans set up for nonprofit organizations and small businesses.

“It’s beginning to be acknowledged that while the 401(k)
is part of the private-sector retirement puzzle, it cannot be
the only part,” Kim said during a meeting of the Information
Management Network’s Public Funds Summit near San Diego.

Under a “secure choice pension” proposal from Kim’s
organization, workers would be required to save 6 percent of
their incomes in retirement plans, to be managed by public-pensions. Participants couldn’t withdraw their assets under
normal circumstances before reaching age 65. The plan assumes an
average annual return on invested assets of 7 percent.

Kim said the idea wouldn’t “dramatically” change private
management of retirement funds, since the new savings would
supplement existing plans rather than replace them.

Last week, Massachusetts Governor Deval Patrick, a
Democrat, signed a bill empowering the state treasurer to manage
retirement-savings plans set up for employees of nonprofit
organizations with fewer than 20 employees, according to a
statement from his office.

Last month, California Senate President Pro Tem Darrell
Steinberg, a Sacramento Democrat, and Senator Kevin de León, a
Los Angeles Democrat, introduced a proposal to let the
California Public Employees’ Retirement System and other fund
managers oversee individual retirement accounts set up by
nongovernment organizations and businesses.